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V2493-22 1 December 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · devengo

Income from orchestra licensing is taxed when accrued and does not qualify for irregular income reduction

A taxpayer requested a ruling regarding the taxation of €278,239 claimed through legal action for the licensing of an orchestra. The DGT determined that VAT accrues when the service is provided and that income for Personal Income Tax (IRPF) purposes must be attributed to the period in which it accrues, unless the cash basis of accounting has been selected.

The question raised

Taxation in VAT and Personal Income Tax.

The DGT's ruling

In VAT, the accrual occurs when the service is rendered, regardless of whether payment has been received. In Personal Income Tax, income from the orchestra's assignment constitutes returns from economic activities that must be imputed to the period of their accrual, following the rules of Corporate Tax. The 30% reduction for irregular income is not applicable, as it does not fit the regulatory assumptions nor does the contract exceed two years of generation.

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